ARE you having problems paying your debts? Are creditors calling you day and night threatening you with a wage garnishment, repossession or foreclosure? Are you starting to feel hopeless and depressed about your situation and don’t know where to turn for help?
The last few years have been tough for a lot of people. You may have suffered a job loss, foreclosure, lawsuit, divorce or other unexpected calamity and now find yourself overwhelmed with debt. You realize that your debt problems are not simply going to go away unless you do something about them but just don’t know where to start.
You have rights under federal law to file bankruptcy and get immediate relief from debt. Bankruptcy is nothing more than a legal remedy that allows you to regain control of your finances so that you can get back on your feet as quickly as possible. Of course, it is not the answer to all financial problems but when appropriate for your situation, it may be the only way for you to get out of the mess you’re currently in.
Although Congress enacted tougher bankruptcy laws in 2005, most people still qualify for debt relief, whether they are wiping out debts under Chapter 7 or reorganizing under Chapter 13. Depending on your circumstances, your debts can be wiped out under Chapter 7 in only a few months or the Court may ask you to repay your creditors with lower monthly debt payments over a 3-5 year period. Either way, the goal is to help you recover financially and help you start a new life free from the burden of excessive debt.
Briefly, Chapter 7 allows you to cancel or discharge your debts but in return, you must give up whatever non-exempt assets you may have. The good news is that most people don’t have much and whatever little they have, they are often protected by the exemption laws in bankruptcy. So it is a misconception that “once you file bankruptcy, you will automatically lose everything.” The truth is that most people keep everything they have (homes, cars, bank accounts, retirement plans, etc) and they lose nothing at all. An experienced and knowledgeable attorney can evaluate your case and help you plan so that you can maximize your exemptions and claim the full benefits allowed by law.
Chapter 13, on the other hand, is a debt reorganization or debt consolidation plan. The court requires you to submit all your income information as well as a monthly budget to assess your ability to pay. Your Chapter 13 plan payments will be based on the surplus income as determined by the Court. Chapter 13 allows you to keep valuable property such as your home or car (although you were behind on your mortgage and car payments at the time of filing) and will stop foreclosure and repossession immediately on the day your case is filed. Credit card debts are included in your monthly payment under Chapter 13 and, in most cases, they can be significantly reduced or even totally eliminated.
If you have a 2nd mortgage on your property that is wholly unsecured due to the fact that your property is “upside down”, you may even qualify to reduce or eliminate it in Chapter 13 through a process called “lien stripping”. This can help a lot of people who are struggling with more than one mortgage payment as it makes their home more affordable while at the same time reducing what is owed on the property. This is something that even a loan modification will not be able to do as principal reductions are very rare when doing a loan modification.
The only way to know if bankruptcy is right for your situation is to consult with a professional who has the knowledge and experience to advise you regarding your options under bankruptcy law. For a free office consultation, please call Toll-Free 1-866-477-7772. We have offices in Glendale, Cerritos, West Covina and Valencia.
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None of the information herein is intended to give legal advice for any specific situation. Atty. Ray Bulaon has successfully helped over 4,000 clients in getting out of debt. For a free attorney evaluation of your situation, please call Ray Bulaon Law Offices at TOLL FREE 1-866-477-7772.